ISLAMABAD – Privatization is commonly known as transfer of the burden ofproduction of goods or services to the private sector; for the efficientconduct of businesses. The pioneers of the idea were Emanuel Saves andRobert Pool founders of the Reason Foundation.
However, the concept of privatization has got importance during the lastquarter of the 20th century, when the Conservative Party of United Kingdomwon the election of 1979 on the agenda of economic reforms and MargaretThatcher became the British Prime Minister. She successfully implementedthis idea and achieved great economic applause. Later, the concept becameincreasingly popular throughout the globe, and especially in developingcapitalist democratic countries.
The rationales behind the notion of privatization have great importanceunder the modern structure of governance. Firstly, the “white elephant” inthe shape of loss-making Public Sector Enterprises (PSE) are causingbillions of Rupees annually which otherwise could be saved and insteadspent on public welfare.
Secondly, the chief function of the government is to run the state affairsand it should focus on facilitating the businesses by creating a favorableenvironment instead of running businesses itself. The core function of thegovernment is to provide better governance not to do good business.Thirdly, privatization of publicly owned units/bodies is the hypotheticalincrease in productivities resulting from private ownership driven by afocus on profit maximization.
Prima facie, the idea of privatization in Pakistan has strong roots if welook at the ground realities. Pakistan economy has been suffering a loss ofbillions of rupees annually owing to the ill performance of state entities.Pakistan Steel Mill (PSM) alone has suffered a loss of more than threehundred billion from 2006-18. The story of Pakistan International Airline(PIA) is even more pathetic.
All previous efforts to manage the loss to national exchequer havecritically failed. The prevailing governance structure has failed to supplya functional system. In light of all these considerations, optimisticallyspeaking we have only one pragmatic solution left; the privatization of thepoorly performed institutions/bodies.
The Pakistan Muslim League Nawaz (PML-N) which is considered to be thepioneer of the idea of privatization in Pakistan. During the electioncampaign of 2013 and the election manifesto of the PML-N has made thepromise of privatization of the loss making state entities to the nation.Five years on it seems that the party has completely failed to implementits pledge. Despite the fact, the party has enjoyed clear majority in theparliament throughout its tenure. They couldn’t enforce the prescribeundertaking. Instead of accepting the failure, the rumors mill is speedinghigh.
As shifting the burden of failures has gained the status of norm in ourcountry. If we ask for the reason of this failure too the probable answerwill be legal complications, politics of protests, victimization, Panamapapers and the lack of consensus inside the parliament over the issue. But,our ruling politicians will never accept their own lack of competency tomanage the schema. If we look at the business of privatization, there arefollowing convincing explanations:
The very first thing to observe is the shortcomings of the ministry ofprivatization. The minister for privatization himself was unsuitable personfor this sensitive portfolio. He has not only lack command over the issue,but was more loyal to his political master than the master himself. He hasleftover all his time to defend the un-defendable. He neither tried toconduct any serious debate over the matter nor make it as a top priority.
Secondly, the government was inadequately prepared to lead the program ofprivatization. At many instances, they appeared ill-prepared for theagenda. Throughout the tenure, the political will to implement the promisedprivatization was looking missed. Whenever any bailment is pending from aninternational body/institution, they pick the agenda again to catch thecash and dump it afterwards. This off-again on-again mantra has damage thelegitimacy of the process. To more accurate, the governments seem to dodgethe international institution in the name of reforms.
Thirdly, the PML-N government has appeared to shift the blame of failure tothe opposition. An argument stated by the treasury benches that; theconducive environment was not available to implement the idea. The role ofopponent was stubborn and they never appreciate the government efforts. Butthey maybe forget the very spirit of the word opposition. Nowhere in theworld can a government be expected without dissent. This is the essence ofdemocracy to deliver in the presence of all odds. In this front, the PML-Nhas faced an unadorned defeat.
Albeit a mechanism has provided by law for the smooth dealing of theprivatization process, the same has never opted with its true spirit. Theconstitution of Pakistan neither explicitly deals with the question ofprivatization nor does bar it. Article 153 and 154 of the constitution ofPakistan in shape of Council of Common Interest (hereinafter referred asCCI) has implicitly provided an alternative mechanism to be followed forprivatization of a public entity. Besides this, following necessaryarticles 172(2) and 173(1) has never been consulted.
To insert the process of privatization, there is a procedure to befollowed. The first prerequisite is to choose an ill performinstitution/company. This assignment is carried out jointly by the planningcommission and the concerned ministry (under the entity operates). Theplanning commission submits a summary of the proposed transaction to itsgoverning Board.
Subsequently, after its endorsement by the Board, submit it to the cabinetcommittee for consideration, and for the final approval of it, will besubmitted to the federal Cabinet. In rare cases, the Cabinet Committee orthe federal Cabinet itself directed the privatization commission forprivatization of an entity, which they deemed fit for. In their bid, theypreferred the least acceptable method.
In sum, the PML-N government during its present tenure couldn’t accomplishany substantial institutional development. Its claim to strengthen theinstitutions once again shows faint. Even this time the government hascompleted its constitutional term of five years. It has nothing sizeable inits cup, except the conclusion of their predecessor initiative; CPEC andthe last-minute joint venture of FATA reforms.
The Panama papers and subsequent disqualification of PML-N superman NawazSharif has considerably demoralized the party. As the general election isonly few days away, Nawaz is playing the card of victimization, but inreality he is rolling more mess around the party politics.
BY: Asad Ameer Chaudhary; Lahore based lawyer and can be reached atasadali141@gmail.com